Lawsuit holding up T&G sale dates to errant newspaper toss

The lawsuit stalling billionaire John W. Henry's $70 million purchase of two Massachusetts newspapers got its start over a seemingly insignificant event a decade ago.

A newspaper carrier working his route tossed a Sunday paper on a porch and cracked a $10 pane of glass.

That incident opened up a legal battle that has touched other U.S. newspapers and fueled at least one multimillion-dollar settlement, all over questions about whether newspaper carriers classified as independent contractors should really be considered employees.

"We have a number of these cases, and the key issue is whether the newspaper has the right to control the manner and the means that the delivery person folds and delivers the newspaper," said Dan Callahan, partner in the Santa Ana, Calif., law firm of Callahan & Blaine, which secured $30 million in two settlements for about 3,000 drivers who delivered the Orange County Register.

The case in Worcester Superior Court that has temporarily blocked the New York Times Co.'s sale of its New England Media Group, which includes the Boston Globe and the Telegram & Gazette, dates back to 2003.

The Telegram & Gazette ended its contract with Thomas G. Driscoll Jr., a newspaper carrier in the Gardner area, in June 2003 after a customer on Mr. Driscoll's route sought compensation for a cracked pane of glass next to a door. Mr. Driscoll allegedly tossed a wrapped Sunday newspaper onto a porch, cracking the glass, in March 2003.

Mr. Driscoll filed for unemployment benefits, but was denied on the grounds he was an independent contractor and not an employee. The case moved to Gardner District Court in 2004. In 2009, Mr. Driscoll and three other Gardner newspaper carriers filed suit in Worcester Superior court. The case became a class action lawsuit.

These kinds of lawsuits come up from time to time in the newspaper industry and are issues for the workers involved and unions that probably would have represented the workers if they had been employees, said Rick Edmonds, a media business analyst for the Poynter Institute, a nonprofit journalism school in Florida.

"I'm not really surprised there is such a suit," Mr. Edmonds said. "It's probably fairly unusual for it to take a turn where it plays a part in a sale transaction."

In California, Mr. Callahan's law firm has pursued misclassification cases against the publisher of the San Diego Union-Tribune, the Sacramento Bee and the Fresno Bee. A judge awarded just under $5 million to plaintiffs in the San Diego case, he said, and the other two cases are going forward.

The newspaper industry is not the only economic sector to confront questions about independent contractors.

The Internal Revenue Service is auditing U.S. companies for possible misclassification of workers, and Massachusetts Attorney General Martha Coakley's office secured a payment of more than $3 million from FedEx Ground in 2010 to settle claims that the company misclassified its drivers as independent contractors.

"We have made enforcement against employer misclassification a priority because employers who misclassify workers are gaining an unfair advantage over their competitors and unfairly depriving the commonwealth of tax and other revenues," Ms. Coakley said at the time in a news release.

The Telegram & Gazette no longer contracts with individual newspaper carriers. The paper outsourced home delivery services in 2011 to Publishers Circulation Fulfillment Inc. of Maryland.

Contact Lisa Eckelbecker at lisa.eckelbecker@telegram.com. Follow her on Twitter @LisaEckelbecker